NEW YORK - ABM Industries Incorporated (NYSE: NYSE:ABM), a prominent provider of facility solutions, has announced the acquisition of Quality Uptime Services, Inc., a critical power services industry leader, for $119 million in cash. The transaction is set to double ABM’s mission-critical related revenue in the first full year post-acquisition.
Quality Uptime, based in Bethel, CT, specializes in maintenance for uninterrupted power supply systems (UPS) and serves data centers and other essential facilities across the nation. With more than 130 employees, the company will join ABM's Mission Critical Solutions group within its Technical Solutions segment. Quality Uptime will retain its brand identity while gaining access to ABM's resources and expertise in electrification infrastructure and microgrids.
ABM’s addition of Quality Uptime is anticipated to expand its service offerings to include comprehensive critical infrastructure solutions. These include electrical testing, switchgear maintenance, breaker testing, UPS service, and battery and power distribution unit maintenance. This acquisition complements ABM’s existing services like microgrid design, construction, critical cooling, and technical project management.
Scott Salmirs, President and CEO of ABM, expressed that the acquisition aligns with the company's ELEVATE strategy and positions ABM to further participate in the burgeoning data center market, which is experiencing growth due to increased investments in artificial intelligence and related infrastructure.
John Raio, CEO of Quality Uptime, remarked on the benefits of joining ABM, highlighting the expanded service offerings and combined expertise that will result from the acquisition. He emphasized the commitment to maintaining the company's standard of excellence and innovation within the data center industry.
ABM, a century-old company, serves over 20,000 clients and generates annualized revenue of over $8 billion. Its workforce exceeds 100,000 team members, operating in over 350 offices across the U.S., U.K., and other international locations.
The acquisition is based on a press release statement.
In other recent news, ABM Industries has reported a strong financial performance for the second quarter of 2024, with year-over-year improvements in nearly all business segments. The company's recent earnings report surpassed expectations, leading to an upward revision of its financial guidance. A significant highlight was the acquisition of new business, totaling approximately $1 billion year to date, including a substantial multi-year micro-grid project valued at $180 million.
Baird, a financial services firm, responded to these developments by increasing its price target for ABM Industries shares to $49.00, while maintaining a neutral rating. The firm noted ABM Industries' better-than-expected contribution from its Business & Industry segment and improved free cash flow, which has facilitated ongoing share buybacks.
ABM Industries has raised its full-year adjusted earnings per share guidance to $3.40 to $3.50, indicating confidence in its strategic initiatives and operational efficiencies. The company also continues its share repurchases, having bought back approximately 555,000 shares.
InvestingPro Insights
As ABM Industries Incorporated (NYSE: ABM) fortifies its position in the critical power services market through strategic acquisitions, the company's financial health and stock performance metrics provide a clearer picture of its market stance. ABM's market capitalization stands at a robust $3.3 billion, reflecting the company's substantial market presence.
An InvestingPro Tip highlights that ABM's stock is trading near its 52-week high, signaling strong market confidence following a notable 21.12% return over the last three months. This is underscored by a steady revenue growth of 3.29% in the last twelve months as of Q2 2024, indicating the company's consistent top-line expansion.
Investors might also take interest in ABM's prudent financial management, as evidenced by a solid P/E ratio of 13.2, which is attractive relative to near-term earnings growth. Additionally, the company has a history of rewarding shareholders, having increased its dividend for three consecutive years and maintained dividend payments for an impressive 54 years. This commitment to shareholder returns is further supported by a high shareholder yield, one of the InvestingPro Tips for ABM.
For investors seeking more in-depth analysis and additional insights, ABM's profile on InvestingPro offers more tips. There are 14 additional InvestingPro Tips available, which could offer valuable perspectives for those considering an investment in ABM Industries. To explore these tips further, readers can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The strategic acquisition of Quality Uptime Services, Inc. by ABM is a calculated move to enhance the company's offerings in the critical power services sector. ABM's solid financial metrics and positive stock performance suggest a promising outlook for the company as it continues to navigate the growing data center market.
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